Pharma to profit from Obama reforms
pharmafile | March 18, 2015 | News story | Sales and Marketing | FDA, GlobalData, Obama, US, healthcare, insurance
President Obama’s healthcare reforms will drive massive growth in the US pharma market a new report is predicting.
The size of the market will rise by nearly 40% over the next six years, buoyed by the increasing use of prescription drugs and the wave of people signing up for health insurance, experts say.
Healthcare research firm GlobalData estimates that the US pharma sector will increase from an estimated value of $395.2 billion in 2014, to reach $548.4 billion by 2020 – or a compound annual growth rate of 5.6 per cent.
The report states this increase will be driven by growing healthcare expenditure; an ageing population; the rising prevalence of chronic lifestyle diseases such as diabetes and obesity; universal and easy access to reimbursement for pharma product costs; and President Obama’s healthcare reforms introduced in the 2010 Patient Protection and Affordable Care Act (PPACA).
Joshua Owide, GlobalData’s director of healthcare industry dynamics, says the reforms will have a ‘substantial impact’ on the US pharmaceutical industry.
“As the PPACA mandates health insurance coverage for all Americans, the US has witnessed increasing use of prescription drugs among individuals who are newly insured or have shifted to insurance plans that offer premium and cost-sharing subsidies.
“Around 20 provisions of the healthcare legislation are expected to have an impact on the volume of drug and biologic sales. As many as 32 million formerly uninsured citizens could enter the patient pool, resulting in new business worth $115 billion over a period of 10 years.”
These factors have contributed to a rise prescription drug spend – from $262.3 billion in 2013 to an estimated $275.9 billion in 2014. The trend is mirrored in a rising number of new drug applications approved by the FDA. Last year it gave the go-ahead for 41 novel treatments, the highest number of approvals in 18 years.
Lilian Anekwe
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